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London property empire amassed by controversial German landlord

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Post by Guest Sun May 11, 2014 11:14 pm

London property empire amassed by controversial German landlord
Henning Conle, who has reputation for shabby buildings and disgruntled tenants in Germany, has snapped up almost £2bn of prime London real estate

A German landlord with a reputation for shabby buildings and disgruntled tenants has emerged as one of the biggest investors in London property in recent years.

Henning Conle, 70, has snapped up almost £2bn of prime real estate, including a series of historic buildings in central London, raising inevitable questions about where he got his money from.

The portfolio includes buildings that house department stores such as Liberty and House of Fraser, the Kensington Roof Gardens complex, the London offices of Manchester United and the art deco Shell Mex House on the Strand.

Until now, little has been known about Conle and the Luxembourg-registered Sirosa company he uses. When the Shell Mex deal was concluded for a reported £610m last year, press reports identified the buyer as a German family named "Conley", a typing error that inadvertently helped to disguise the owner.

Conle has a somewhat tarnished reputation in his native land, where he is thought to own more than 10,000 properties.

In Hamburg, where at one point in the 1990s he owned up to 2,500 flats, newspapers used to call him "the phantom", because of his apparent lack of interest in looking after the properties he owned.

Tenants complained about crumbling buildings and bullying tactics. In 1998, a Hamburg court ruled that Conle had used illegal methods against tenants who were late with their payments, leaving threatening notices up in public hallways.

"I'm very surprised to hear that Henning Conle has re-emerged as a global player," said Sylvia Sonnemann of Hamburg's tenants association Mieter helfen Mietern. "Here he was known for his shoddy methods, being notoriously slow to act when his tenants complained about burst water pipes or other structural problems."

There has been speculation that Conle may be investing money from other clients, possibly even from Russia – but the landlord denies this. In a statement, he said: "The properties [in London] were financed by means of bank credits and capital resources. It is untrue that the purchases were carried out as a facade for investors from eastern Europe."

n London, his growing empire is attracting notice in the property industry. "The name Sirosa was one of the names most spoken about in the central London real estate market last year, yet one of the most below-the-radar firms," said Joanna Bourke, West End editor of Estates Gazette.

In the Ruhr region, too, where Conle grew up and still owns many properties, former tenants complain that buildings were neglected. Annette Klovekorn lived in a Conle flat in Duisburg in the 1980s: "The state of the apartment was a catastrophe: about eight wallpapers had been stuck on top of one another, plaster was drizzling from the ceiling. Every year, Conle asked for about 100 Deutschmarks for repairs which were never made."

Thirty years later, the same building is still in disrepair. One current tenant complained about rotting window frames, broken door locks, woodworm-infested staircases and a rat infestation."Don't invest anything in property and squeeze as much out of it as you can: that's the Conle method as we've got to know it," said Peter Hess of the Duisburg region's tenants association.

However, the properties Conle has bought in London are all period buildings, four of them listed. The Grade II*-listed Liberty department store on Regent Street, which Conle acquired for £41.5m in 2010 , is one of the best-known mock-Tudor buildings in Britain.

Others, such as Barkers department store on Kensington High Street, Plaza shopping centre on Oxford Street and House of Fraser's flagship store on the same street, are classic pieces of art nouveau architecture.

Over the last two years, Conle has also acquired the Grade II-listed Stratton House for £166m in 2012, which houses the London offices of Manchester United.

Last year, Sirosa outbid the Qatar Investment Authority to buy Kensington Roof Gardens, home to a Virgin luxury club and restaurant, for £25m over its £200m asking price, followed shortly afterwards by a swoop for Shell Mex House, for which Conle paid £116m more than the previous owner paid in 2007.

Financially, Conle's investments have certainly made sense: the value of central London property grew steadily throughout the global financial crisis. One London estate agent who worked with Conle described investing in commercial property in the British capital as "a one-way bet. Residential can be incredibly messy, but commercial is a good place to park your money – it allows you to remain passive."

Responding to allegations of neglect of his German properties, Conle told the Guardian: "There are no significant allegations regarding conscious negligence or illegal methods."

Henning Conle comes from a family with a long – and often controversial – track record in property management. Father Heinz and uncle Kurt Conle, both from Mühlheim , ran one of the leading architecture agencies in postwar Germany.

Over the course of the 1950s, the Conle brothers made a fortune on the back of the "economic miracle", building up to 18,000 apartments and municipal buildings , allegedly using criminal methods to win contracts . In 1961, Heinz Conle was put on trial for having bribed a local official and embezzling public funds – the trial was discontinued in 1967, due to the death of brother Kurt.

http://www.theguardian.com/uk-news/2014/may/11/london-property-empire-controversial-german-landlord

This is what is happening to London now. People who work in London cannot afford to buy there, because prices have gone through the roof. The are being bought by the world's richest people and then left to rot.

Shell-Mex House is a fantastic building. My ex-husband worked there when I met him and I worked in Shell Centre across the river. It would be a disgrace if it was yet another building that falls into disrepair.


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Post by Ben Reilly Mon May 12, 2014 5:15 am

It just doesn't seem like it makes economic sense to buy a building and not use them -- hope this guy gets investigated and has to sell this off. I've heard before about rich people from overseas snapping up prime London real estate but I think that was mainly residential property, which they also don't occupy, and that's causing downturn in those areas where the local businesses don't have enough nearby customers.
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Post by Guest Mon May 12, 2014 10:10 am

Ben_Reilly wrote:It just doesn't seem like it makes economic sense to buy a building and not use them -- hope this guy gets investigated and has to sell this off. I've heard before about rich people from overseas snapping up prime London real estate but I think that was mainly residential property, which they also don't occupy, and that's causing downturn in those areas where the local businesses don't have enough nearby customers.

Unfortunately Ben, at the moment it makes perfect economic sense. Prices in London are rising so quickly that if someone buys a building and just sits on it for a couple of years, then sells it off, they make a fortune. It's an artificial situation, but there doesn't seem to be any end to it at the moment. People who actually live and work there don't stand a chance.

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Post by Fred Mon May 12, 2014 3:28 pm

Oh dear are we being racist again Sassy. Krouts buys good old English homes???

We can buy homes in Germany Spain France etc etc. It his right.

I'll ask him to write you an apology for being rich enough will that do comrade?

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Post by veya_victaous Mon May 12, 2014 10:52 pm

Sassy wrote:
Ben_Reilly wrote:It just doesn't seem like it makes economic sense to buy a building and not use them -- hope this guy gets investigated and has to sell this off. I've heard before about rich people from overseas snapping up prime London real estate but I think that was mainly residential property, which they also don't occupy, and that's causing downturn in those areas where the local businesses don't have enough nearby customers.

Unfortunately Ben, at the moment it makes perfect economic sense.   Prices in London are rising so quickly that if someone buys a building and just sits on it for a couple of years, then sells it off, they make a fortune.   It's an artificial situation, but there doesn't seem to be any end to it at the moment.   People who actually live and work there don't stand a chance.

we are having similar issue in Sydney (I am looking to buy my first home and it is pretty much impossible and I am on a better than average wage)
but it does look like it is starting to crack now...... hopefully we will see prices come back to a more realistic price.

There has been a huge amount of construction in the last decade particularly apartments and town houses but both have been poor value, with developers wanting too close to the price of house and land, I think we may see a crash in apartment prices in the next year or 2.
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Post by Guest Tue May 13, 2014 12:58 am

Alright said Fred wrote:Oh dear are we being racist again Sassy. Krouts buys good old English homes???

We can buy homes in Germany Spain France etc etc. It his right.

I'll ask him to write you an apology for being rich enough will that do comrade?

Oh dear....weren't you banned at some point, but you are still allowed to post, with the RWhingers constant approval of course.

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